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There have been many articles published in recent months, and indeed over the last

several years, about slot hold, with 🏀 many at least partially attributing the industry’s

woes to rising hold.

“Hold” is the expected amount of each wager that the 🏀 slot machine

“holds” over time. A slot machine with 5 percent hold is expected to produceR$5 revenue

for the casino 🏀 for everyR$100 in wagers. The same machine may be described as having 95

percent “RTP” or return-to-player.

Over the past two 🏀 decades, we’ve seen average slot

holds rise considerably, largely due to the proliferation of higher-hold penny video

slots. See Nevada’s 🏀 hold, for example, in the figure below.

To contextualize this

increase, bettingR$1 per spin at eight spins per minute, aR$100 budget 🏀 would last on

average 249 minutes at the 5.02 percent hold we saw in 1993, but only 187 minutes at

🏀 the 6.7 percent hold we saw in 2024. If we were instead to look at the effect of moving

from 🏀 9 percent hold to 10.68 percent hold (the same 1.68-point increase, more

indicative of penny slot hold), time on device 🏀 for thatR$100 budget would decrease on

average from 138.9 minutes to 117 minutes, a decline of more than 15 percent 🏀 or nearly

22 minutes of play.

Increased hold is decreasing the average time of slot sessions.

This isn’t a controversial viewpoint; 🏀 it’s just math—if the machine holds more per

spin, players with a fixed budget necessarily spend less time on machines.

The

🏀 question, “Can players ‘feel’ the effect of hold changes?” has been studied by

academics, and they’ve concluded that players cannot. 🏀 Industry experts have countered

this research by arguing that increased hold is nonetheless degrading the experience of

the slot player, 🏀 for example by decreasing time on device. These critics argue that a

player-centric rather than a machine-centric review is necessary.

These 🏀 views may seem

irreconcilable, and intuitively, how could players not feel a decrease of 20 minutes on

device? This article 🏀 is intended to bring together these views. I’ve spent a lot of

time studying these questions with slot operators, finance 🏀 teams, economists, and data

scientists, and as such, have a unique perspective on the problem.

Players Can’t Feel

Hold Changes

Anthony Lucas, 🏀 a professor at the University of Nevada, Las Vegas, has

published several articles with various co-authors on how players can’t 🏀 “feel” the

effects of a hold change. The evidence has been several-fold, with the most compelling

arguments being that:

A computer 🏀 (let alone a human) can’t accurately distinguish

between two different return-to-player (RTP) settings in a number of observations that

mimic 🏀 a human slot session on a reel machine; and,

Lucas and his co-authors have run a

number of live experiments in 🏀 casinos with side-by-side machines of the same theme, one

with low hold and one with high hold, and observed empirically 🏀 that the high-hold

machines perform better financially.

Both of these findings are sound. That is, in

nearly all cases, a player 🏀 cannot accurately tell the difference if a machine’s hold is

changed, sometimes even dramatically. Though, I should note there are 🏀 several ways of

going from hold A to hold B, and some of these may be easier for players to 🏀 “feel” than

others. We’ll discuss why hold changes are not all created equal later on.

In the cases

studied, using variants 🏀 of actual paytables from reel slot machines, Lucas and

co-author A.K. Singh argue (correctly) that players can’t possibly tell the 🏀 difference

between hold settings, because even computers cannot tell the difference with any

degree of certainty across 500 spins (representing 🏀 approximately an hour of continuous

slot play) or even across longer sessions. Certainly, players may guess, as can

computers, but 🏀 they are wrong nearly as often as they are right.

Players can’t “feel”

the time decrease because slot machine outcomes are 🏀 volatile. As a wise man once said,

“you never know what you’re gonna get.”

This effect is born out on slot 🏀 floors, as

described in Lucas’ recent work with Kate Spilde, where they measure the performance of

high-hold and low-hold versions 🏀 of the same slot machines placed next to each other on

the floor, finding that the high-hold machines outperform the 🏀 low-hold machines

empirically.

My own experiences echo these results. In nearly every example I’ve ever

seen—including the dozens of tests I’ve 🏀 run with slot teams on real, live casino

floors—the higher-hold machine of a pair of like machines generates higher win 🏀 than the

lower-hold machine. That is, slot patrons don’t shift their play to the lower-hold

device. Players truly can’t feel 🏀 hold changes.

How Can Player Behavior Be Impacted If a

Player Can’t Feel Hold Changes?

It would be easy to conclude, as 🏀 Lucas does in several

of his articles, that casinos can perhaps increase their revenues by increasing slot

hold. But upon 🏀 reflection this is far from clear.

First, the side-by-side machine

comparison fails to ask about the rest of the slot floor, 🏀 about the rest of the

player’s wallet. Is the increased financial performance of the high-hold machine simply

displaced win from 🏀 the rest of the floor? Or, asked differently, do the players that

lose less on the lower-hold machine exhibit increased 🏀 play elsewhere on the floor? In

other words, do players generally lose the same amount on the visit, but those

🏀 experiencing lower hold just lose slower and on more machines, getting more time in the

casino?

Second, even if we were 🏀 able to measure the overall wallet impact of

experiencing lower or higher hold on a single visit, how does this 🏀 experience impact

likelihood to return, or frequency of visitation? Is it possible that a lower-hold

experience today means that a 🏀 player will return to the casino sooner, producing the

same amount of revenue or more over more visits?

As an extreme 🏀 thought experiment,

consider that a machine that holds 100 percent—never returning a dime to a player—will

perform financially better in 🏀 the short term, for some definition of “short term.” But

as a player, if you walked into a casino withR$100 🏀 and lost on every spin of your

machine, would you consider yourself unlucky on that trip? Would you hesitate before

🏀 returning? How would you feel if it happened again on your next trip?

This thought

experiment—even if 100 percent hold is 🏀 extreme—provides a useful way of thinking about

how players can be impacted by hold changes even if they don’t know 🏀 that the hold is

higher. Players don’t experience theoretical hold. Players experience the random

sequence of outcomes that the machine 🏀 produces in the short amount of time that they

play on the machine. They experience “Did I have a good 🏀 time while I was at the

casino?”

This question will have different criteria for different players: How long did

my budget 🏀 last me? Did I get to experience fun bonus games on the machine? Did I have

positive staff interactions? Was 🏀 my restaurant or valet experience good? And the answer

to “Did I have a good time while I was at 🏀 the casino?” influences player behavior

related to return trips: Will the player return, and how soon?

A player who has a 🏀 bad

session at low theoretical hold has the same negative experience as a player who has a

bad session at 🏀 high theoretical hold. Tying this all together, increased hold leads to

a higher proportion of players experiencing losing sessions, short 🏀 sessions, and

therefore, overall negative experiences.

We know that actual loss correlates to overall

experience, and you can validate this with 🏀 your own guest survey results. Players who

have “winning experiences” as measured by the duration of play that their budget 🏀 allows

or as measured by the experience of low actual hold (including those who win on the

trip) tend to 🏀 report better satisfaction with staff interactions, beverage service, and

several other areas of guest experience. And we all believe that 🏀 experience matters in

choosing whether entertainment budget should be spent at a casino, and furthermore when

choosing which casino to 🏀 visit.

By increasing theoretical hold, even if any individual

player can’t tell that we’ve done so, we increase the number of 🏀 players whose random

sequence of slot outcomes leads them to have poor overall experiences at the casino,

and this can 🏀 have downstream effects in terms of visitation and spend.

So, What’s an

Operator to Do?

It’s important to stress that I don’t 🏀 think there’s a one-size-fits-all

solution to hold changes. For large commercial properties on the Las Vegas Strip, where

revenue is 🏀 shifting rapidly to non-gaming predominance, where casual visitors to Las

Vegas have small gambling budgets relative to their overall vacation 🏀 budgets, where the

overall trip experience has many components beyond their experience on the casino

floor, and where the time 🏀 between trips is lengthy, it may make sense to push hold high

and capture the tourist gambling dollar before the 🏀 competitor down the street can

capture it.

Next year, when planning their annual Las Vegas trip, the thought of how

quickly 🏀 theirR$100 budget was captured by the slots will be dwarfed by their pool,

dining, nightclub and hotel experiences, and by 🏀 the “sin” in Sin City.

In regional

markets, by contrast, casinos may have large segments of patrons visiting upwards of 30

🏀 or 40 days per year. Gambling is the main concern at these properties, and markets are

quite competitive, with many 🏀 having four or more easily accessible casinos, not to

mention the regional or national destination markets—Las Vegas, Atlantic City, Biloxi,

🏀 and so on—that are also competing heavily for these guests. Here, hold is a more subtle

concern.

Casinos in these markets 🏀 must carefully assess the impact that hold has on

their businesses, but understanding the tradeoff between short-term financial gain

(take 🏀 the money quickly) and long-term business stability (Do we alienate our guests

and cause them to reduce or cease visitation?) 🏀 is not an easy task. In contrast to the

Las Vegas market, the gambling experience at regional casinos by-and-large is 🏀 the

customer experience, so operators should approach the gambling experience with

caution.

Macro Considerations For a Slot Hold Strategy

In assessing the 🏀 impact of a

changing slot hold strategy, we must understand the balance between guests who are

time-constrained, those who will 🏀 leave the casino before they’ve exhausted their

gambling budget, and guests who are wallet-constrained, those who will exhaust their

monetary 🏀 budget before they exhaust their allotment of time. If a guest is

time-constrained, a reduction in slot hold will reduce 🏀 the rate at which they lose (on

average), and the casino will capture less of their gaming budget on their

🏀 (fixed-length) trip. In order to make this decision profitable, the casino would need

to increase the visitation of those guests 🏀 to compensate for the reduced revenue.

If a

guest is wallet-constrained, however, a reduction in slot hold will simply increase the

🏀 time that the guest’s budget lasts, providing more time in the casino and more positive

experiences, i.e., more “bang for 🏀 their buck.” Of course, if we increase the duration

of the guest’s wallet too much, the guest may become time-constrained, 🏀 and we run the

risk of losing the guest’s available budget. It seems natural to argue that a perfect

balance 🏀 would be struck if we could have each guest expend their monetary and time

budgets simultaneously.

Quantifying time-constrained versus wallet-constrained guests

🏀 is difficult to do scientifically. But as an example of this thinking, in a market like

Biloxi—where many patrons are 🏀 lodgers and as such are a relatively captive

audience—guests are likely more wallet-constrained than time-constrained, and a lower

slot hold 🏀 environment may increase player satisfaction (and ultimately visitation,

etc.) while effecting a very limited impact on gaming spend.

And besides making 🏀 the

casino experience more fun, which we would hope leads to increased visitation, the

limited revenue loss from the gaming 🏀 floor on that visit may be recuperated by retail

and dining outlets, albeit at a different margin.

My own experience in 🏀 the Louisiana

and Mississippi markets suggests that Biloxi casinos tend to provide

richer-than-typical free-play offers. Increased free play and reduced 🏀 slot hold have a

similar effect, increasing time on device, which is low cost to the casino so long as

🏀 the patrons are wallet-constrained and not time-constrained.

Of course, many of these

arguments can be applied to Las Vegas as well, 🏀 but Las Vegas visitors are more

time-constrained than one might imagine. The allure of other amenities, or even other

casino 🏀 properties, limits the amount of vacation time allocated to gambling in any one

location. And with the proliferation of regional 🏀 gaming, this makes sense. Most

visitors come to Las Vegas for the party, for the pools, for the weather, for 🏀 the food.

The gambling is a nice-to-have, as opposed to Biloxi, where the gambling may be a

primary focus of 🏀 the visit.

Additional considerations when developing an overall hold

strategy for a property may include:

The floor’s utilization: Higher utilization

suggests a 🏀 higher hold strategy, as reduction of time on device can alleviate any

periods of prohibitive utilization, which itself degrades the 🏀 guest experience.

Higher

utilization suggests a higher hold strategy, as reduction of time on device can

alleviate any periods of prohibitive 🏀 utilization, which itself degrades the guest

experience. The quality and diversity of a property’s amenity set: The more

opportunities a 🏀 property has to provide great experiences to a guest suggests a higher

hold strategy, as the slot experience may contribute 🏀 less to the overall guest

experience.

The more opportunities a property has to provide great experiences to a

guest suggests a 🏀 higher hold strategy, as the slot experience may contribute less to

the overall guest experience. The frequency of visitation of 🏀 the patron database:

Higher-frequency properties might consider a lower-hold approach, since there is a high

dependence on return visitation.

Higher-frequency properties 🏀 might consider a

lower-hold approach, since there is a high dependence on return visitation. The

competitiveness of the local market: 🏀 Properties in highly competitive markets might

consider a lower-hold approach as a way to improve guest experience.

Micro

Considerations For a 🏀 Slot Hold Strategy

I mentioned before that moving from one hold to

another isn’t a universal concept. That is because there 🏀 are many ways to change a pay

table. As an example, consider the following simple mock game:

In this game, we

🏀 wagerR$1, and we either lose ourR$1, or we winR$1,R$2,R$10, orR$10,000. The bonus game

that produces a win ofR$10 is triggered 🏀 on average every 40 spins, and theR$10,000

jackpot is triggered on average every 100,000 spins.

Now let’s say our aim is 🏀 to

increase the hold to 13 percent. One way to do this is to decrease the frequency of the

bonus 🏀 game to 1 in 50:

Could a player “feel” this difference? How quickly? At eight

spins per minute, this represents a 🏀 loss of approximately 2.4 bonus games per hour.

This is a question we can answer with science, but keeping this 🏀 concept in mind,

consider this alternative version of the simple game that also achieves 13 percent

hold:

In this variation, we’ve 🏀 returned the bonus game to a 1-in-40 proposition but

reduced the frequency of the top award to 1-in-220,000. This pay 🏀 table should provide

identical game play as the 7.5 percent pay table, to nearly everyone who plays the

game. No 🏀 one will be able to detect with any certainty that the top award has become

less frequent, as no one 🏀 expects to hit the top award anyway. Given the option, we

would certainly put the “fewer jackpots” version on the 🏀 floor before the “fewer bonus

games” version.

In other words, there are ways to raise hold without impacting the

player experience, 🏀 and there are ways to raise hold while lowering the occurrence of

relatively frequent events that the player celebrates. To 🏀 the extent that we can

accomplish the former, we should do so enthusiastically. With the latter, we should

proceed cautiously.

Only 🏀 a careful review of PAR sheets, which detail pay tables and

frequencies of game awards, can give a clear indication 🏀 of how hold changes will affect

player experience, and these can be cumbersome (I’ll say, politely) to read and

interpret. 🏀 A broad-based hold increase without regard to how hold is increased will

certainly affect player experience.

An ideal hold strategy would 🏀 be designed at the

game level. Operators and manufacturers would work together on how to provide the best

player experience 🏀 while achieving operator financial goals.

Another consideration

pointed out to me by savvy slot operators is the speed of the processors 🏀 in newer

games. They keenly note that players don’t necessarily experience hold as a percentage

of slot handle, but rather 🏀 as a loss-per-hour. We are seeing max bets and cost-to-cover

on penny games increase, processor speeds producing more spins per 🏀 hour, and holds

rising, resulting in even more substantial increases in loss per hour.

Conclusion

I’ve

worked with several properties on their 🏀 slot hold strategy as an operator and as a

consultant. While there is no one overarching method for measuring the 🏀 impact of slot

changes, I’ve been fortunate in my roles to work with talented teams of slot operators,

economists, statisticians 🏀 and data scientists to develop methodologies to evaluate the

performance of slot hold changes.

We’ve developed benchmarks and metrics to look 🏀 at

player behavior, machine performance, and overall property performance, each providing

a different lens into the effects of these changes. 🏀 With forward-thinking operations

teams, we’ve run tests as aggressive as altering the hold on more than 30 percent (!)

of 🏀 the machines on a casino floor. As expected, higher hold approaches have produced

more revenue on average in the short 🏀 term, though at a mildly diminishing rate.

Most of

the studies were run for only six to 12 months, so I 🏀 don’t know if in two, three, five

or 10 years we’d conclude that a lower hold strategy would produce the 🏀 loyalty and

guest experience effects needed to outweigh the short-term effects of raising hold. Or

whether we’d find in the 🏀 end that cranking up the hold produces stronger financial

outcomes across the board.

Casinos continue to navigate the tradeoffs of immediate

🏀 gains at the risk of degrading guest experience in many areas—resort fees in hotels,

outlet fees in bars, ATM fees 🏀 approachingR$10, and even parking fees. Regardless of the

enterprise’s overall strategy, taking a tactical, property-specific and game-specific

approach can help 🏀 achieve the desired short-term financial outcomes while managing the

guest experience impacts and mitigating some of the potential long-term effects 🏀 on the

business.

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